Trend Lines

Trend Lines

The term ‘trend’ describes the current direction of the financial instrument or an investor’s outlook towards the direction of a financial instrument. A trend line can be drawn on a chart between two or more price pivot/turning points. Trend lines are commonly used to judge entry and exit points when trading.

There are 5 types of trends:

Bullish

A bullish trend is the term given to an optimistic outlook whereby there is a belief that a particular instrument is about to rise (buy opportunity)

Bearish

A bearish trend is the term given to a pessimistic outlook whereby there is a belief that a particular instrument is about to drop (sell opportunity)

Hawkish

A hawkish trend is the term given to a favoured increase in interest rates (buy opportunity)

Dovish

A dovish trend is the term given to a favoured decrease in interest rates (sell opportunity)

Ranging/Flat

When the market is ranging or flat, this suggests that the price of the instrument is neither rising nor falling. This type of trend usually indicates a change in the overall direction of a trend